ASSESSING INFLATION CONVERGENCE IN THE EUROPEAN UNION: DOES EURO MEMBERSHIP MAKE A DIFFERENCE?

• Authors: Holmes Mark J.
• Languages of publication: EN

Abstracts

EN

This study offers a new perspective on the debate concerning inflation convergence in the Euro Area. A new pair-wise unit root testing procedure advocated by Pesaran (2007) is employed on all possible bivariate consumer price index differentials. Evidence in favour of long-run convergence is confirmed where the fraction of rejections in favour of stationary exceeds the size of the individual tests. We find evidence of long-run inflation convergence across the EU, though the speed of convergence is lower for current non-Euro Area countries.

Keywords

EN

INFLATION CONVERGENCE; UNIT ROOTS; COINTEGRATION; EUROPEAN UNION; EURO; EU

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2009
• Volume: 57
• Issue: 10
• Pages: 949 – 962

Contributors

author

Holmes Mark J.

• Department of Economics, University of Waikato, New Zealand